Should hotel companies have only one brand?

A month ago, the Taj Group finally made the announcement that the hotel and travel trade had long been expecting.

At an elegant lunchtime function held at the flagship hotel in Mumbai, the company’s CEO Rakesh Sarna unveiled the Taj Group’s new branding.

There were a few surprises. The struggling (but apparently, very nice) safari lodges got their own brand: Taj Safaris. The Delhi Taj got renamed Taj Mansingh officially, which is what everyone called it unofficially anyway.

But the big announcement was the rebirth of the Taj brand. Chinmai Sharma, the Taj’s Chief Revenue Officer, announced (by implication) that there would be no more Vivanta or Gateway hotels. Everything would be called Taj.

From a commercial point of view, the move made absolute sense. When you take hotels with the Taj brand (such as Mumbai’s The President) and downgrade them to Vivantas, you lose out on perceived value. Guests will expect to pay less for a second brand.

Then, there is the staff aspect. A three-tier structure creates a caste system within the company. A guy who works at a Taj property resents being shifted to a Vivanta.

And finally, there were the operational and conceptual imperatives. Nobody had properly thought through the branding when it was first implemented. An ad campaign for Gateway Hotels advertised a hip product that did not exist. The Vivantas had no unifying feature to give the brand an identity. The Connemara, which should be to Chennai what the Taj is to Mumbai or the West End is to Bengaluru, was downgraded to a Vivanta and put in the same category as the new, faceless, ugly hotels that the Taj had taken on management contracts.

So the rebirth of the Taj brand was widely welcomed and not surprising. I interviewed Sarna last year and wrote that I believed that with his international hoteliering background, he would recognise what a mess the Taj Group’s branding was and throw it out.

There is one other factor that must have contributed to the euthanising of the sub-brands though nobody said very much about it at the relaunch function. There was a time (till recently, in fact) when the Taj Group was the biggest hotel chain in India. The group has continued to expand (not always wisely, alas), but it is no longer the biggest. That distinction goes to Marriott, after its merger with Starwood.

Only five years ago, we would have regarded it as unthinkable that a foreign chain would run the largest hotel group in India. But the world is changing. Sarna, I imagine, knows this. He was with Hyatt when the chain developed a strong Indian presence to the extent that its hotels are now among the top properties in most major Indian cities.

The threat from foreign groups is now so strong that Indian chains need to build their own brands for a new generation of users. Ironically, the Taj did the opposite during the crucial period when foreign brands were taking over. It actually diluted the Taj brand.

"So goodbye and farewell, Vivanta! You left before anyone was even able to figure out what your name meant!"

So, should hotel companies have only one brand? In most of the world, they will tell you that the opposite is true. The big hotel conglomerates own dizzying arrays of brands. Try and get somebody from say, Accor or Marriott to sit down and list all their brands and you won’t get clear answers. Most groups have so many brands that nobody (not even their own executives) can remember all of them.

Sometimes there is an inherent logic to the branding. In the US, Marriott is not an upmarket name. So it makes sense to treat Ritz Carlton as a distinct brand. Accor is so vast that it does not particularly want to own up to downmarket hotels like Ibis.

On the other hand, it can also get confusing. Westin and Sheraton are both owned by Starwood, but I still haven’t worked out what the difference is. (I assume we should discount the fact that Westin managers are encouraged not to wear ties and to look as though they have just returned from a jog.)

There should be a clear distinction between Accor’s Novotel and Sofitel brands but even as guests were trying to figure out what the difference was, Accor came up with yet another brand: Pullman. A Pullman hotel abroad (say, the old Paris Hilton, which is now a Pullman) can be basic in terms of services. But the Pullman in Delhi’s Aerocity is a full-fledged luxury hotel with gourmet food. So which is the real Pullman?

It’s not clear to me that Indians are that obsessed with branding anyway. The great global luxury brands have had less impact in India than they expected. One of my favourite hotels in Bengaluru is the Ritz Carlton with its air of discreet luxury. But it does not get the rate premium it should command. The Four Seasons in Mumbai is a very nice hotel but the market does not accord it the respect that a Four Seasons would get in other countries. The Shangri-La is a luxury chain, but India has proved largely immune to its global reputation and stature. I haven’t been to the St Regis in Mumbai but it is just a makeover of what used to be India’s single worst five-star hotel, the Palladium.

Nor do foreign brand names necessarily make an impression with Indians. The Mumbai Taj was an Intercontinental for many years. The Nariman Point Trident was built as a Sheraton. It was later called Hilton for a while. Did the names really register? Did anyone ever think of The Maurya as a Sheraton?

What about The Lalit in Delhi? It has been a Holiday Inn, a Crowne Plaza, a Hilton, an Intercontinental and God alone knows what else. But the name changes have made no difference to its performance or image. (In fact, it has a better image now without a foreign brand name.)

There are, I think, possibly two exceptions. A well-known hotel company often needs a second brand aimed lower down the market with a different name. We hardly notice but ITC’s Fortune division has nearly 50 hotels, far more than the famous ITC hotels we talk about. When the Taj decided, in the 1980s, that it needed hotels that offered lower levels of luxury, it built a Gateway lodge in Chiplun (on the road from Mumbai to Goa), and refurbished the old East West hotel in Bengaluru and renamed it Gateway. Other than that, everything remained a Taj property.

I asked Ajit Kerkar, who created the modern Taj Group, if he would ever have taken the Taj name away from such hotels as The President, The Connemara or the Fort Aguada. He was appalled by the very suggestion. Yes, he might have judiciously expanded Gateway in the years to come. But that was it. He would certainly not have taken perfectly good Taj hotels and downgraded them to Gateways.

Of the luxury chains, there are only a few that have been able to pull off more than one upmarket brand. Hyatt in India has such a consistent luxury quotient that it doesn’t matter if you are at a Grand Hyatt or a Hyatt Regency. (Park Hyatts can be even more luxurious, except for the Goa property.) And Biki Oberoi runs the Trident sub-chain to such levels of excellence that its properties (in Bandra-Kurla, Gurgaon, Udaipur etc.) are better than many top level luxury hotels run by other chains.

The other exception is the so-called ‘lifestyle hotel’, which I wrote about some weeks ago. Because these are meant to appeal to people who want to get away from the mother brand, they have completely different names and branding. Starwood pulled it off globally with the commercial success of the W (there’s one in Goa now) and Hyatt has made Andaz work.

Apart from that, I think most Indians find a profusion of brands confusing rather than helpful. We like trusted names and we want to be sure of the hospitality we will receive.

So goodbye and farewell, Vivanta! You left before anyone was even able to figure out what your name meant!

Comments

S. Rao
07 Mar 2017

Well, I stayed several times at the Sofitel in San Francisco, which is now a Pullman. And also stayed at the Grand Chola , Leela Palace & ITC Windsor in Chennai & Bangalore. The Pullman is no comparison for the Indian Hotels. The sheer luxury, comfort & food quality of the Leela, Grand Chola & ITC is far better, atleast *1 star better than any American or European hotel. I would consider Westin & Hilton in New York as low market with lower food quality.